House Prices

[Coobeastie]

Why are house prices in the UK so high? Was watching one of those lifestyle programs yesterday about houses in Spain and France and they are so cheap compared to here.

[Ethel]

Quite simply because people are prepared to pay those high prices.

Also there is a shortage of houses - not enough to go round, so the rules of supply and demand come into force.

When interest rates go up (and they will) there will be less buyers, more sellers and prices could drop - they will at least level out.

[Buenchico]

In many countries where house prices are low (compared with the UK) you'll find that it's still the accepted 'norm' for Dad to go out to work while Mum stays at home to look after the kids and do the housework. This means that most families have only one wage-earner and house prices have to be lower than in the UK for them to be affordable to the local population.

In the UK it's considered 'normal' for both partners to have a job. While it's obviously a good thing that women have (largely) achieved equality in the jobs market, the downside is that, because most households now have two wage-earners, house prices have been pushed higher than in less 'liberated' parts of Europe.

Chris

[buildersmate]

Agree with the above. Its also partly a cultural thing with those 2 countries - not as many people aspire to the country living that many Brits aspire like. If you do to one of the big French cities prices are not so different for something equivalent.

Contrary to some beliefs, UK house prices has little to do with profits being made by construction companies - large or small. A high market price for the finished house sets the market price for the plot of land - not the other way around. Land is the commodity that can't have an increased supply of. The way large building companies make some of their 'large' profits is through sitting on land banks.

[Yodel]

One of the problems in France is that everything is so centralised on Paris and other major cities that there's no employment in some of the more rural areas. That makes rural properties cheaper because natives can't afford to live there - it's only the holidaying Brits that drive the prices up!

[Coobeastie]

Beunchiro can see where you're coming from but even on a combined wage a lot of people simply can't afford to buy anything but the smallest of houses.

With prices so high it's unlikely that they will be able to upgrade to something more family orientated at a later stage and if the market crashes they'll be in negative equity. According to a newspaper today (think it was the express) houses prices are now on average 7 times the average wage.